Chilean miners expect copper prices to stay high for two to three years but remain wary of labeling the boom a “supercycle” like what happened a decade ago, a senior executive said on Tuesday.
The price of copper soared to record highs this year on expectations of global economic recovery and fast-rising demand after a year of stagnation amid the coronavirus pandemic. But analysts and marketwatchers have debated how long the boom will last.
Diego Hernández, president of the National Society of Mining (SONAMI), an umbrella group for Chile’s top miners, said the electric vehicle revolution and booming renewable energy industry would prop up demand and prices in the medium-term.
But he urged caution about forecasting a longer-lasting supercycle during which prices would stay over $4 per pound.
“We believe that we must be cautious regarding the future behavior of copper, although we project two or three years with high prices.”
Surging copper prices have also piqued the interest of lawmakers in Chile, who have proposed a stiff new royalty on sales of the metal that would increase alongside their value.
Hernandez and Sonami have strongly opposed the royalty bill as written, saying it would squander the competitiveness and future investment plans of Chilean miners.
“We hope that sanity prevails in the Senate and we can reach an agreement that allows mining to continue making their contribution to the economic development of the country, “he said.
Proponents of the bill say proceeds from the newly proposed royalty are urgently needed to underwrite social programs for Chileans suffering from the coronavirus pandemic.
(By Fabian Cambero and Dave Sherwood; Editing by David Gregorio)